Hello, hopefully someone can help me. I bought a crypto (HEX) and sent it be staked… how do I classify this on koinly ? Is it an exchange or a sent to pool ? Thanks I’m advance.
If you are a resident of the UK, Koinly’s UK tax guide says that HMRC takes the position that a staking transaction is taxable when you receive a liquidity pool token in exchange for the staked crypto. In this case the transaction should be recorded as an Exchange. If you are not receiving a token the transaction should not be taxable. In this case, record the Withdrawal as Sent to Pool. Below is the relevant excerpt from the Koinly UK tax guide.
Adding or removing liquidity
Deep into DeFi? Most DeFi protocols use liquidity pools. If you’re investing in these, at a glance you might not think of them as a taxable event. They’re more akin to transferring your crypto from one place to another because you’re not actually disposing of the asset.
HMRC however disagrees. They say if you receive a liquidity pool token in exchange for your crypto - it’s a disposal. You can add up your cost basis based on tokens you’ve sent to the pool and then subtract that amount from the fair market value of the tokens at the point of disposal. Your liquidity pool tokens then inherit this as the cost basis for when you want to remove them from the pool.
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